India leads Corporate Responsibility Reporting Rates in the World

New Delhi: The Asia Pacific region has overtaken others on Corporate Responsibility (CR) reporting rates, with India amongst the top 10 countries with the highest rate of CR information according to The KPMG Survey of Corporate Responsibility Reporting 2015. More companies (79 percent) now report on CR in Asia Pacific than in any other region, followed by the Americas (77 per cent) and then Europe (74 per cent). This growth has been driven by a surge of CR reporting in countries such as India, Taiwan and South Korea, where increasing amounts of reporting requirements and guidelines have been introduced.

The ninth edition of this annual report analyses reporting from 4,500 companies across 45 countries, and offers advice on leading practices in corporate carbon reporting and how these companies measure up against key criteria. Published in the run-up to the upcoming annual UN Climate Talks (COP21), where expectations are high for global agreement on reducing carbon emissions, the report also focusses on the quality of carbon reporting among the world’s 250 largest companies (G250).

“Corporate reporting is entering into a whole new exciting phase, with CR becoming a firmly integral part of annual reports. It is encouraging to see that India is leading, with all top companies reporting on CR, but we can see through this survey that the quality of Indian reports can improve further. CR is emerging as a board level agenda and is likely to bring in more integration to business strategy and improved quality of reports.” said Mritunjay Kapur, Partner and Head of Risk Consulting, KPMG in India.

The report highlights that the overall rate of CR reporting worldwide continues to grow, with around three quarters (73 per cent) of the companies now reporting on CR versus 71 per cent in 2013. If we compare this with the G250 companies, the current rate of CR reporting for these companies stands at 92 per cent. Over the last four years, this has fluctuated between 90 and 95 per cent; the report expects the rates to remain at this level for the foreseeable future.

“Today, all of the largest Indian firms report on CR, compared with just 20 per cent of companies in 2011. Last year the Government of India made it mandatory for large companies to report on CSR projects undertaken and to disclose details, including the spending on these projects, in their annual report. This, combined with Business Responsibility Reporting (BRR) requirement for top 100 listed entities from the Securities and Exchange Board of India (SEBI), has pushed the rate of CR reporting in India to the highest in the world.” said Santhosh Jayaram, Director – Climate Change and Sustainability, KPMG in India.

The report states that G250 companies are now under ever increasing pressure to cut their carbon emissions as the global economy shifts slowly, but steadily, towards a low-carbon (and eventually zero-carbon) model. Although four out of five G250 companies identify climate change and carbon as material issues and report on their carbon emissions, surprisingly, some big companies in sectors known for high emissions do not identify the same as material issues, and do not report the same. In terms of the quality of reporting, European companies lead, with reporting scores at an average of 62 out of a possible 100 considering they report more data on carbon emissions than companies in other regions, as well as provide more information on their progress against carbon reduction targets. In Asia Pacific, it is the Australian companies that lead in carbon reporting quality, with an average score of 65.

Well over half (56 per cent) of the companies worldwide do so, compared to only 20 per cent in 2011, driven mainly by regulation in many countries, including the 10 countries with the highest rates of CR disclosure in financial reports. This trend for companies to include more non-financial (social and environmental) information in annual financial reports is expected to continue as CR information is also increasingly becoming relevant to stakeholders’ understanding of a company’s true value to society